09/08 Yahoo shares extend
decline on ad concerns
NEW YORK, Sept 8 (Reuters) - The shares
of Internet media and services company Yahoo! Inc. <YHOO.O> slipped Friday
as concerns about advertising spending continued to spook investors.
Santa Clara, Calif.-based Yahoo's shares
were down $3-1/4 at $103-11/16 in early afternoon trading.
The company's shares have fallen more
than 25 percent since August 24 on heightened concerns the slowdown in ad
spending by dot-com companies is not being offset by traditional companies yet,
which could result in a more challenging quarter for companies whose business
models incorporate ad revenues.
SG Cowen analyst Scott Reamer said in a
research note Friday that advertising growth may be coming down permanently and
media players like Yahoo and DoubleClick would fare worse than technology
players like L90 Inc. <LNTY.O> and Mediaplex Inc. <MPLX.O>
Originally, Reamer said he had believed
ad sales would snap back in the fourth quarter, but he is less confident now.
Online advertising network DoubleClick
Inc.'s <DCLK.O> stock also fell, down $1-13/16 to $34-7/16.
"In the face of weaker dot-com
advertising, Yahoo managed to skate through the (June quarter) and hold their
advertising picture together," said Arnold Berman, technology strategist at
Wit/Soundview. "Since then, they have become open about the fact that their
business is challenging and likely to remain so in the near-term."
Yahoo said last week it did not see a
material change in past statements about its business, but added the company was
not immune to the changes in the dot-com world and it is working a little harder
in this quarter than in the past given the tightness of the dot-com advertising
budgets.
He added that September is often a
period when investors "bite their nails" about the coming quarter for
technology stocks and while Yahoo's results have been strong in the past, it is
now giving investors more reason to bite their nails than ever before."
But some investors were confident Yahoo
was a core stock to own.
"In this country we spend something
north of $300 billion on advertising and the Internet is only getting $2 to $3
billion of that. There are always short-term concerns, but in the long-term,
advertisers need to own the stock, said Robert Burgoyne, technology strategist
at Monument Internet Fund, which owns the stock.
